An auditor should obtain evidential matter relevant to all the following factors concerning third-party litigation against an entity except the:
A)period in which the underlying cause for legal action occurred.
B)probability of an unfavorable outcome.
C)jurisdiction in which the matter will be resolved.
D)existence of a situation indicating an uncertainty as to the possible loss.

Question

Quizplus · Accepted Answer

The jurisdiction in which the matter will be resolved is less relevant to the auditor compared to the period of the underlying cause, the probability of an unfavorable outcome, and the existence of a situation indicating an uncertainty as to the possible loss. These factors directly affect the financial statements and the need for disclosures or reserves, whereas the jurisdiction is more of a legal detail that does not directly impact the financial statement's presentation of the litigation's potential effect.

An Auditor Should Obtain Evidential Matter Relevant to All the Following